SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant
toss.240.14a-11(c) orss.240.14a-12
SILVERSTAR HOLDINGS, LTD.
--------------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined): 4. Proposed maximum aggregate value of transaction:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify vthe filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
SILVERSTAR HOLDINGS, LTD.
-----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 16, 2002
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Stockholders
(the "Meeting") of Silverstar Holdings, Ltd. (the "Company") will be held at the
offices of Jenkens & Gilchrist Parker Chapin LLP, The Chrysler Building, 405
Lexington Avenue, Ninth Floor, New York, New York on Monday, December 16, 2002,
at 12:00 p.m., Eastern Standard Time, to consider and act upon the following
matters:
1. The election of five (5) directors of the Company to serve as the
Board of Directors until the next annual meeting of stockholders and
until their successors are duly elected and qualified;
2. A proposal to ratify the action of the Board of Directors in
appointing Rachlin Cohen & Holtz LLP as the Company's independent
public accountants for the fiscal year ending June 30, 2003; and
3. The transaction of such other business as may properly come before the
Meeting or any adjournment or postponement thereof.
Information regarding the matters to be acted upon at the Meeting is
contained in the accompanying Proxy Statement.
The close of business on November 15, 2002 has been fixed as the
record date for the determination of stockholders entitled to notice of and to
vote at the Meeting and any adjournment or postponement thereof. A list of such
stockholders will be open for examination by any stockholder for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting at Jenkens & Gilchrist Parker Chapin LLP, The
Chrysler Building, 405 Lexington Avenue, Ninth Floor, New York, New York 10174.
By Order of the Board of Directors,
Dawna Ferguson,
Secretary
Hamilton, Bermuda
November 25, 2002
- --------------------------------------------------------------------------------
It is important that your shares be represented at the Meeting. Each stockholder
is urged to sign, date and return the enclosed form of proxy which is being
solicited on behalf of the Board of Directors. An envelope addressed to the
Company's transfer agent is enclosed for that purpose and needs no postage if
mailed in the United States.
- --------------------------------------------------------------------------------
SILVERSTAR HOLDINGS, LTD
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
December 16, 2002
This Proxy Statement is furnished to the holders of our common stock,
par value $.01 per share, and to the holders of our Class B common stock, par
value $.01 per share in connection with the solicitation of proxies by our Board
of Directors for use at our Annual Meeting of Stockholders to be held on Monday,
December 16, 2002, at 12:00 p.m., Eastern Standard Time, at the offices of
Jenkens & Gilchrist Parker Chapin LLP, The Chrysler Building, 405 Lexington
Avenue, Ninth Floor, New York, New York, and at any adjournment or postponement
of such meeting. The Annual Meeting is being held for the purposes set forth in
the accompanying Notice of Annual Meeting. The approximate mailing date of this
Proxy Statement is November 25, 2002.
The close of business on November 15, 2002 has been fixed by the Board
of Directors as the record date for the determination of stockholders entitled
to notice of, and to vote at, the Annual Meeting and any adjournment or
postponement of such meeting. As of the record date, there were 7,843,033 shares
of our common stock outstanding and 926,025 shares of our Class B common stock
outstanding, which are the only classes of our voting securities issued and
outstanding. Each share of our common stock outstanding on the record date will
be entitled to one vote on all matters to come before the Annual Meeting. Each
share of our Class B common stock outstanding on the record date will be
entitled to five votes on all matters to come before the annual Meeting.
Cumulative voting is not permitted. A majority of our total issued voting
shares, represented in person or by proxy, is required to constitute a quorum
for the transaction of business at the Annual Meeting. Proxies submitted which
contain abstentions or broker nonvotes will be deemed present at the Annual
Meeting in determining the presence of a quorum.
The affirmative vote of a majority of the votes cast, in person or by
proxy, at the Annual Meeting will be required to elect each director (Proposal
1) and to ratify the appointment of Rachlin Cohen & Holtz LLP as our independent
public accountants for our fiscal year ending June 30, 2003 (Proposal 2).
Abstentions, broker non-votes and votes not otherwise cast at the Annual Meeting
will not be counted for the purpose of determining the outcome of the vote on
Proposals 1 and 2. Our Board of Directors has unanimously recommended a vote in
favor of each nominee named in the Proxy and for Proposal 2.
Unless otherwise specified, all proxies received will be voted for the
election of all nominees named herein to serve as directors and in favor of each
of the other proposal set forth in the accompanying Notice of Annual Meeting of
Stockholders and described below. A proxy may be revoked at any time before its
exercise by delivering written notice of revocation to our Secretary, by
executing a proxy bearing a later date or by attendance at the Annual Meeting
and electing to vote in person. Attendance at the Annual Meeting without voting
in person will not constitute revocation of a proxy.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 31, 2002, certain
information as to the beneficial ownership of the our common stock by:
o each person known by us to own more than five percent (5%) of our
outstanding shares;
o each of our directors;
o each of our executive officers named in the Summary Compensation Table
under "Executive Compensation"; and
o all of our directors and executive officers as a group.
Amount and Nature of Beneficial
-------------------------------
Ownership (1)
-------------
Name and Address of Common Class B Percentage Percentage of
Beneficial Shareholder Stock Common of Voting
---------------------- ------ Stock (2) Ownership Power
--------- (1)(3) (1)(3)
---------- -------------
Michael Levy 321,000(4) 736,589(5) 11.3% 30.8%
9511 West River Street
Shiller Park, IL 60176
Clive Kabatznik 837,500(6) 190,000 10.4% 13.2%
6100 Glades Road
Suite 305
Boca Raton, FL 33434
Cornelius J. Roodt 185,000(7) 0 2.0% 1.4%
P.O. Box 4001
Kempton Park
South Africa
American Stock Transfer 354,334(8) 166,452(8) 5.8% 9.4%
& Trust Company
6201 15th Avenue
Brooklyn, New York 11219
David BenDaniel 30,000(9) 0 * *
6100 Glades Road
Suite 305
Boca Raton, Florida 33434
Joseph Weil 25,000(10) 0 * *
6100 Glades Road
Suite 305
Boca Raton, Florida 33434
Stanley Castleton 25,000(10) 0 * *
6100 Glades Road
Suite 305
Boca Raton, Florida 33434
All executive officers and 1,392,500(11) 926,589 22.7% 43.22%
directors as a group (5
persons)
* Less than 1%.
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(1) Beneficial ownership is calculated in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934. Shares subject to stock options, for
purposes of this table, are considered beneficially owned only to the
extent currently exercisable or exercisable within 60 days after August 31,
2002.
(2) Except as otherwise indicated, each of the parties listed has sole voting
and investment power with respect to all shares of Class B common stock
indicated above.
(3) For the purposes of this calculation, our common stock and our Class B
common stock are treated as a single class of common stock. Our Class B
common stock is entitled to five votes per share, whereas our common stock
is entitled to one vote per share.
(4) Includes 300,000 shares of our common stock issuable upon exercise of
options that are immediately exercisable.
(5) Includes (i) 570,137 shares of our Class B common stock and (ii) 166,452
shares of our Class B common stock issued to the American Stock Transfer &
Trust Company pursuant to the terms of an escrow agreement, which shares
correspond to a like number of shares of First South African Holdings
(Pty.) Ltd. Class B stock. American Stock Transfer & Trust Company has
granted to Mr. Levy a proxy to vote each of such shares of our Class B
common stock.
(6) Includes 725,000 shares of our common stock issuable upon exercise of
options that are immediately exercisable.
(7) Includes 185,000 shares of our common stock issuable upon exercise of
options that are immediately exercisable.
(8) Based solely upon information contained in a Schedule 13G, Amendment No. 1,
dated 12/31/99 filed with the Securities and Exchange Commission. All
shares are held as escrow agent pursuant to various escrow agreements.
American Stock Transfer & Trust Company holds a proxy to vote the shares of
common stock. Michael Levy holds a proxy to vote the shares of Class B
Common Stock.
(9) Includes 30,000 shares of our common stock issuable upon the exercise of
options that are immediately exercisable.
(10) Includes 25,000 shares of our common stock issuable upon the exercise of
options that are immediately exercisable.
(11) Represents 1,290,000 shares issuable upon exercise of options that are
immediately exercisable.
3
---------------------------------------------
PROPOSAL 1
ELECTION OF DIRECTORS
---------------------------------------------
At the Annual Meeting, our stockholders will elect five (5) directors
to serve until the next annual meeting of stockholders and until their
respective successors are elected and qualified. Unless otherwise directed, all
proxies will be voted in favor of the election of Messrs. Levy, Kabatznik,
Roodt, Castleton and Weil to serve as directors. Messrs. Levy, Kabatznik, Roodt,
Castleton and Weil currently serve on our Board of Directors and their terms
expire at the Annual Meeting.
Each nominee has advised us of his willingness to serve as a director
and we have no reason to expect that any of the nominees will be unable to stand
for election at the date of the Annual Meeting. In the event that a vacancy
among the original nominees occurs prior to the Annual Meeting, the proxies will
be voted for a substitute nominee or nominees, if any are named by our Board of
Directors, and for the remaining nominees.
Information About Nominees
The following table sets forth information regarding the nominees:
Name Age Director Since Positions with the Company
---- --- -------------- --------------------------
Michael Levy 56 1995 Chairman of the Board of Directors
Clive Kabatznik 46 1995 Vice Chairman of the Board of Directors,
Chief Executive Officer, President, Chief
Financial Officer and Director
Cornelius J. Roodt 43 1996 Director
Stanley Castleton 55 2001 Director
Joseph Weil 47 2001 Director
All directors hold office until their respective successors are
elected, or until death, resignation or removal. Officers hold office until the
meeting of the Board of Directors following each Annual Meeting of Stockholders
and until their successors have been chosen and qualified.
Michael Levy is our co-founder and has served as Chairman of our Board
of Directors since our inception. Since 1987, Mr. Levy has been the Chief
Executive Officer and Chairman of the Board of Arpac L.P., a Chicago-based
manufacturer of plastic packaging machinery.
Clive Kabatznik is our co-founder and has served as a director and our
President since inception and as our Vice Chairman, Chief Executive Officer and
Chief Financial Officer since October 1995. From July 1992 to July 1995 Mr.
Kabatznik served as President of Colonial Capital, Inc., a Miami-based
investment banking company that specializes in advising middle market companies
in areas concerning mergers, acquisitions, private and public agency funding and
debt placements.
Cornelius J. Roodt has served as a member of our Board of Directors
since December 1996 and was appointed Managing Director and Chief Financial
Officer of one of our subsidiaries, First South African Holdings (Pty.) Ltd., in
July 1996. Mr. Roodt was responsible for overseeing all of the South African
operations of First South African Holdings (Pty.) Ltd. Mr. Roodt led the buyout
of First Lifestyle
4
Holdings and he is currently Chief Executive of the successor company, First
Lifestyle Holdings, (Pty) Ltd. He is no longer an executive officer of any of
our subsidiaries. From February 1994 to June 1996, Mr. Roodt was a senior
partner at Price Waterhouse Corporate Finance, South Africa. From January 1991
to January 1994, he was an audit partner at Price Waterhouse, South Africa.
Stanley Castleton has served as a member of our Board of Directors
since December 2001. Mr. Castleton is, and for the past six years has been, the
President of DDRM, Inc., the managing general partner and asset manager of the
Hilton Anaheim, and he is currently also the Managing Member of DDRM Greatplace
LLC, a real estate development company.
Joseph Weil has served as a member of our Board of Directors since
December 2001. Mr. Weil has served as the President and Chief Executive Officer
of Joseph Weil & Sons, Inc. since 1985. Joseph Weil & Sons is an independent
wholesale distributor of paper products, packaging supplies and equipment,
sanitary products, janitorial supplies and equipment, as well as food service
products and office equipment. He also serves as an active member of many
business associations including Afflink Worldwide Trade Group which he serves as
Chairman of the Board of Directors. Since 1996 he has also served as an
Executive Board Member of the Greater Illinois chapter of the National Multiple
Sclerosis Society.
Board Meetings and Committees
Our Board of Directors is responsible for our overall management.
During the fiscal year ended June 30, 2002, our Board of Directors held three
(3) meetings and did not act by unanimous written consent. Each incumbent
director, except for David BenDaniel and Stanley Castleton, attended at least
75% of all meetings of the Board and committees on which the person served which
were held during the year.
Our Board of Directors has an audit committee and a compensation
committee. The audit committee is composed of Cornelius Roodt, David BenDaniel
and Michael Levy. The audit committee is responsible for recommending annually
to the Board of Directors the independent auditors to be retained, reviewing
with the independent auditors the scope and results of the audit engagement and
establishing and monitoring our financial policies and control procedures. The
audit committee met once during fiscal year ended June 30, 2002.
The compensation committee is currently composed of Michael Levy and
Joseph Weil. These persons are intended to be non-employee directors within the
meaning of Rule 16b-3(b)(3)(i) promulgated under the Securities Exchange Act of
1934. The compensation committee has power and authority with respect to all
matters pertaining to compensation payable and the administration of employee
benefits, deferred compensation and our stock option plans. The Compensation
Committee did not meet during fiscal year ended June 30, 2002.
Compensation of Directors and Nominees
Except for Mr. Levy, our non-employee directors do receive $1,000 for
each meeting they attend and options to purchase 10,000 shares of our common
stock granted to each non-employee director under our 1995 Stock Option Plan.
Mr. Levy receives an annual consulting fee of $60,000 and options to purchase
10,000 shares of our common stock for every year of service as a director. All
directors will be reimbursed for their reasonable out-of-pocket expenses
incurred in connection with their duties. Upon their election to the Board in
December 2001, Messrs. Castleton and Weil were each granted options to purchase
15,000 shares of our common stock under our 1995 Stock Option Plan.
5
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the aggregate
compensation we paid or accrued to our Chief Executive Officer during the fiscal
years ended June 30, 2000, June 30, 2001 and June 30, 2002. Apart from Mr.
Kabatznik, whose annual salary is $315,000, only one of our executive officers
of any of our subsidiaries received compensation in excess of $100,000 during
the fiscal year ended June 30, 2002.
Summary Compensation Table
Annual Compensation Long Term Compensation
--------------------------------- -----------------------------------
Name and Fiscal Salary Bonus Other Annual Restricted Securities
Principal Position Year Compensation Stock Underlying
Ended Awards Stock Options
June 30,
- ------------------ -------- ------ ----- ------------ ---------- -------------
$ $
Clive Kabatznik, 2002 315,000 0 --- --- 5,000
President and Chief 2001 303,750 0 5,000
Executive Officer 2000 230,000 0 255,000
Andy Bark, 2002 112,500 0 50,000
Chief Executive
Officer, Student
Sports, Inc.
The options granted to Mr. Kabatznik during fiscal year ended June 30, 2002
represent:
o an option granted under our 1995 Stock Option Plan to purchase 5,000
shares of our common stock, which is currently exercisable at an
exercise price of $0.42 per share;
The options granted to Mr. Kabatznik during fiscal year ended June 30, 2001
represent:
o an option granted under our 1995 Stock Option Plan to purchase 5,000
shares of our common stock which is currently exercisable at an
exercise price of $0.75 per share;
The options granted to Mr. Kabatznik during fiscal year ended June 30, 2000
represent:
o an option granted under our 1995 Stock Option Plan to purchase 5,000
shares of our common stock which is currently exercisable at an
exercise price of $5.125 per share; and o a non-plan option granted by
our Board of Directors to purchase 250,000 shares of our common stock
which is currently exercisable at an exercise price of $4.875 per
share.
The options granted to Mr. Bark during fiscal year ended June 30, 2002
represent:
o an option granted under our 1995 Stock Option Plan to purchase 50,000
shares of our common stock which is exercisable at an exercise price
of $0.80 per share and vests on September 24, 2004.
6
Options Granted in Fiscal 2002
The following table sets forth the details of options to purchase
common stock we granted to our executive officers during fiscal year ended June
30, 2002, including the potential realized value over the 5 year term of the
option based on assumed rates of stock appreciation of 5% and 10%, compounded
annually. These assumed rates of appreciation comply with the rules of the
Securities and Exchange Commission and do not represent our estimate of future
stock price. Actual gains, if any, on stock option exercises will be dependent
on the future performance of our common stock. Each option is immediately
exercisable.
Options Granted
---------------
Name Number of Percent of Total Per Potential Realizable
Securities to Share Value at Assumed Annual
Underlying Employees in Exercise Expiration Date Rate of Stock Price
Options Fiscal Year Price Appreciation
For Option Term
- ---------------------- ---------- ---------------- -------- --------------- -----------------------
5% 10%
--------- --------
Clive Kabatznik 5,000 900% $.42 December 18, $580.00 $1,282.07
2006
Aggregated Option Exercises In Last Fiscal Year And Fiscal Year-End Option
Values
During the fiscal year ended June 30, 2002 no options were exercised
by our executive officers. The following table sets forth the number of shares
of our common stock underlying unexercised stock options granted by us to our
executive officers and the value of those options at June 30, 2002 The value of
each option is based on the positive difference, if any, of the closing bid
price for our common stock on the Nasdaq National Market on June 30, 2002 or
$0.30, over the exercise price of the option.
Number of Securities Underlying Value of Unexercised In the Money
Unexercised Options at Options at Fiscal Year-End
Fiscal Year-End
------------------------------- ---------------------------------
Name of Executive Officer Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------- ----------- ------------- ---------------------------------
Clive Kabatznik 725,000 - $- $-
Employment Agreements
On April 12, 2000, the Company's Board of Directors approved an
Amended and Restated Employment Agreement with Clive Kabatznik (the "Employment
Agreement"). Pursuant to the Employment Agreement, Mr. Kabatznik will serve as
the Chief Executive Officer, President and Chief Financial Officer of the
Company beginning as of February 1, 2000 and continuing through and until
January 31, 2005. As compensation for his services, Mr. Kabatznik will receive
an annual base salary of $300,000 (with five percent increases each year), and
an annual bonus of five percent of net realized capital gains upon the sale,
liquidation or distribution by the Company of any Portfolio Company (as defined
in the Employment Agreement). A Portfolio Company does not include any of the
South African entities currently owned by the Company. In the event of a Change
in Control (as defined in the Employment Agreement), Mr. Kabatznik may also be
entitled to a payment of five percent of any net unrealized capital gains on any
Portfolio Company, which gains may, at the option of the Company, be paid in
cash, stock of the Portfolio Company or any combination of the foregoing.
7
On November 30, 2000, Fantasy Sports Inc. entered into Employment
Agreement with Gregory S. Liegey (the "Employment Agreement"). Pursuant to the
Employment Agreement, Mr. Liegey will serve as the Chief Executive Officer, of
Fantasy Sports Inc. beginning as of November 30, 2000 and continuing through and
until November 30, 2003. As compensation for his services, Mr. Liegey will
receive an annual base salary of $100,000 with increases at the discretion of
the board of directors of Fantasy Sports Inc. In addition, Mr. Liegey received a
three-year option to acquire 5% of the shares of Fantasy Sports, Inc.
outstanding as of November 16, 2000, at a price equal to that paid by Silverstar
Holdings upon acquisition of the assets of Fantasy Sports Inc. A similarly
priced performance based three-year option to acquire a further 2.5% of the
outstanding shares of Fantasy Sports Inc. as of November 16, 2000 was also
issued to Mr. Liegey. This performance based option will vest on the earlier of
Fantasy Sports Inc. achieving an aggregate EBITDA of $4 million for calendar
years 2001 and 2002 or an aggregate EBITDA of $9 million for calendar years
2001, 2002 and 2003.
On September 24, 2001, Student Sports, Inc. entered into an employment
Agreement with Andrew Bark (the "Employment Agreement"). Pursuant to the
Employment Agreement, Mr. Bark will serve as the Chief Executive Officer of
Student Sports beginning as of September 15, 2001 and continuing through and
until September 24, 2004. As compensation for his services, Mr. Bark will
receive an annual base salary of $150,000 with annual increases at the
discretion of the board of directors of Student Sports, Inc. In addition, as an
incentive to Mr. Bark and the employees of Student Sports, Inc., a pool of up to
900,000 shares of Silverstar Holdings, Ltd., may be issued to Mr. Bark and the
employees based on the following events:
o Should the aggregate audited pretax profit reported by Student Sports
Inc. (the "Student Sports") for the two years ended December 31, 2002,
and December 31, 2003, be less than $1 million, no shares will be
issued.
o Should the aggregate audited pre-tax profit reported by Student Sports
for the two years ended December 31, 2002 and December 31, 2003 be
less than $2 million, 90,000 shares from the pool shall be forfeited
for each $100,000 profit shortfall, up to a maximum of 900,000 shares.
o In the event that a qualified strategic partner makes a binding offer
to invest in Student Sports prior to December 31, 2002 at a valuation
equal to or greater than $7 million or prior to December 31, 2003 at a
valuation equal or greater than $9.35 million, then the full 900,000
share pool will be issued. A "qualified investor" shall be deemed to
be a major company that is investing cash or services with a
demonstrable value, to be determined and agreed at the sole discretion
of Silverstar in a reasonable manner, of a minimum of $1 million.
o 50,000 Silverstar options at a strike price of $0.80 per share will be
issued to Andy Bark. These options will vest at the earlier of 3 years
or when any of the full provisions for release of the 900,000 share
incentive pool are achieved.
Stock Option Plan
Our Board of Directors has adopted and our shareholders, prior to our
initial public offering, approved our 1995 Stock Option Plan. Our 1995 Stock
Option Plan provides for the grant of:
o options that are intended to qualify as incentive stock options within
the meaning of Section 422 of the Internal Revenue Code of 1986 to key
employees; and
o options not intended to so qualify to key employees, including our
directors and officers, and to directors and consultants who are not
employees.
The total number of shares of our common stock for which options may be granted
under our 1995 Stock Option Plan is 850,000 shares.
8
Our 1995 Stock Option Plan is administered by the compensation
committee of our Board of Directors. The compensation committee will determine
the terms of options exercised, including the exercise price, the number of
shares subject to the option and the terms and conditions of exercise. No option
granted under our 1995 Stock Option Plan is transferable by the optionee other
than by will or the laws of descent and distribution and each option is
exercisable during the lifetime of the optionee only by such optionee or his
legal representatives.
The exercise price of incentive stock under our 1995 Stock Option Plan
must be at least equal to 100% of the fair market value of such shares on the
date of grant, or 110% of fair market value in the case of an optionee who owns
or is deemed to own stock possessing more than 10% of the voting rights of our
outstanding capital stock. The term of each option will be established by the
compensation committee, in its sole discretion. However, the maximum term for
each incentive stock option granted under our 1995 Stock Option Plan is ten
years, or five years in the case of an optionee who owns or is deemed to own
stock possessing more than 10% of the total combined voting power of our
outstanding capital stock. Options will become exercisable at such times and in
such installments as the compensation committee will provide in the terms of
each individual option. The maximum number of shares for which options may be
granted to any individual in any fiscal year is 210,000.
Our 1995 Stock Option Plan also contains an automatic option grant
program for our directors. Each of our non-employee directors is automatically
granted an option to purchase 10,000 shares of our common stock following each
annual meeting of shareholders. In addition, each of our employee directors is
automatically granted an option to purchase 5,000 shares of our common stock
following each annual meeting of shareholders. Each grant has an exercise price
per share equal to the fair market value of the our common stock on the grant
date, is immediately exercisable and has a term of five years measured from the
grant date, subject to earlier termination if an optionee's service as a Board
member is terminated for cause.
Through October 31, 2002, we have granted options to purchase 655,000
shares of our common stock under our 1995 Stock Option Plan, 110,000 of which
have been exercised.
Non-Plan Stock Options
We have granted non-plan stock options to purchase 1,225,000 shares of
our common stock, 500,000 of which were granted at an exercise price of $4.75
per share, 600,000 of which were granted at $4.06 per share and 125,000 at $0.75
per share.
PERFORMANCE GRAPH
The following graph compares the cumulative return to holders of our
common stock for the period commencing June 30, 1997 and ending September 30,
2002 with the Nasdaq Index and the Standard & Poor's Conglomerate Index as a
peer group index for the same period. The comparison assumes $100 was invested
on June 30, 1997 in our common stock and in each of the comparison groups. We
have paid no dividends to shareholders to date.
9
# 06/30/1997 09/30/1997 12/31/1997 03/31/1998 06/30/1998 09/30/1998 12/31/1998
LPHL Stock Price # 8.75 8.75 6.31 7.56 4.19 0.94 0.938
Nasdaq Composite
Index # 1442.07 1685.69 1570.35 1835.68 1894.74 1693.84 2192
S@P SmallCap Leisure
Products Index # 104.41 104.31 85.23 97.35 88.96 77.46 79.14
# 06/30/1997 09/30/1997 12/31/1997 03/31/1998 06/30/1998 09/30/1998 12/31/1998
LPHL Stock Price # 100.00375 100.00375 72.1455625 86.4318125 47.864652 10.720402 10.720402
Nasdaq Composite
Index # 100.00 116.90 108.90 127.30 131.40 117.46 152.01
# 100 99.9042237 81.6301121 93.2381956 85.2025668 74.1882961 75.7973374
03/31/1999 06/30/1999 09/30/1999 12/31/1999
LPHL Stock Price 2.188 4.813 3.94 12.50
Nasdaq Composite
Index 2461.41 2686 2746 4069
S@P SmallCap Leisure
Products Index 65.6 77.81 67.54 70.99
03/31/1999 06/30/1999 09/30/1999 12/31/1999
LPHL Stock Price 25.006652 55.007777 45.007402 142.8625
Nasdaq Composite
Index 170.69 186.27 190.43 262.18
62.8292309 74.5235131 64.68729049 67.9915717
# 03/31/2000 06/30/2000 09/30/2000 12/31/2000 03/31/2001 06/30/2001 09/30/2001
LPHL Stock Price # 9.00 3.25 1.00 0.75 0.875 0.8 0.64
Nasdaq Composite
Index # 4572 3966 3673 2471 1840 2162 1499
S@P SmallCap Leisure
Products Index # 57.56 51.34 51.74 48.96 53.51 74.02 58.78
# 03/31/2000 06/30/2000 09/30/2000 12/31/2000 03/31/2001 06/30/2001 09/30/2001
LPHL Stock Price # 102.861 37.14425 11.429 8.57175 10.000375 9.1432 7.31456
Nasdaq Composite
Index # 317.06 275.03 254.72 171.36 127.60 149.93 103.95
# 55.1288191 49.1715353 49.55464 46.89206 51.2498803 70.893593 56.29729
12/31/2001 03/31/2002 06/30/2002
LPHL Stock Price 0.5 0.51 0.3
Nasdaq Composite
Index 1950 1845 1463
S@P SmallCap Leisure
Products Index 19.61 91.09 80.69
12/31/2001 03/31/2002 06/30/2002
LPHL Stock Price 5.7145 5.82879 3.4287
Nasdaq Composite
Index 135.23 127.95 101.46
76.247486 87.2426013 77.28187
10
[GRAPH OMITTED]
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of our compensation committee of our Board of
Directors is now or ever has been one of our officers or employees. None of our
executive officers serves as a member of the board of directors or compensation
committee of any entity that has one or more executive officers serving on our
Board of Directors or our compensation committee.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has reviewed Silverstar's audited financial
statements for the last fiscal year and discussed them with management.
Silverstar's independent auditors, Rachlin Cohen & Holtz LLP ("RCH")
have discussed with the Audit Committee the quality, in their judgment, as well
as the acceptability of Silverstar's accounting principles as applied in its
financial reporting. RCH, the Audit Committee and management have discussed
matters such as the consistency, clarity and completeness of accounting policies
and disclosures, the reasonableness of significant judgments and accounting
estimates, significant audit adjustments, and such other matters as are required
to be discussed with the Audit Committee under generally accepted auditing
standards.
RCH has discussed with the Audit Committee and has disclosed to the
Audit Committee, in writing, all relationships between RCH and its related
entities and Silverstar and its related entities that, in RCH's professional
judgment, may be reasonably thought to bear on independence and has confirmed
that in its professional judgment, RCH is independent of Silverstar within the
meaning of the Securities Act of 1933, as amended.
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The Audit Committee, based on the review and discussions described
above, has recommended to the Board of Directors that the audited financial
statements be included in Silverstar's Annual Report on Form 10-K for the last
fiscal year.
Michael Levy, Chairman
David BenDaniel
Cornelius Roodt
Audit Fees
Audit Fees billed to the Company by Rachlin Cohn & Holtz LLP for its
audit of the Company's financial statements for the year ended June 30, 2002 and
for its review of the financial statements included in the Company's Quarterly
Reports on Form 10-Q filed with the Securities and Exchange Commission for that
year totaled $92,619.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
executive officers and directors, and persons who beneficially own more than 10%
of our common stock, to file initial reports of ownership and reports of changes
of ownership with the Securities and Exchange Commission and furnish copies of
those reports to us. Based solely on a review of the copies of the reports
furnished to us to date, or written representations that no reports were
required, we believe that all reports required to be filed by such persons with
respect to our fiscal year ended June 30, 2002 were timely made.
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PROPOSAL 2
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
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The firm of Rachlin Cohen & Holtz LLP audited our financial statements
for the fiscal year ended June 30, 2002. The Board of Directors has, subject to
ratification by our stockholders, appointed that firm to act as our independent
public accountants for the fiscal year ending June 30, 2003. Accordingly,
management will present to the Annual Meeting a resolution ratifying the
appointment of Rachlin Cohen & Holtz LLP as our independent public accountants
for the fiscal year ending June 30, 2003. A representative of Rachlin Cohen &
Holtz LLP is not expected to be present at the Annual Meeting.
The Board of Directors recommends that stockholders vote FOR this
Proposal.
VOTING REQUIREMENTS
The affirmative vote of a majority of the votes cast, in person or by
proxy, at the Annual Meeting will be required to elect each director (Proposal
1) and to ratify the appointment of Rachlin Cohen & Holtz LLP as our independent
public accountants for our fiscal year ending June 30, 2003 (Proposal 2).
Abstentions, broker non-votes and votes not otherwise cast at the Annual Meeting
will not be counted for the purpose of determining the outcome of the vote on
Proposal 1 and 2.
The Board of Directors has unanimously recommended a vote in favor of
each nominee named in the Proxy and FOR Proposal 2.
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MISCELLANEOUS
Stockholder Proposals
Any stockholder proposal intended to be presented at the 2003 Annual
Meeting of Stockholders must be received by us not later than August 18, 2003
for inclusion in our proxy statement and form of proxy for that meeting.
Solicitation of Proxies
We are bearing the cost of preparing, assembling and mailing the
Notice of Annual Meeting, this Proxy Statement and proxies. We will also
reimburse brokers who are holders of record of our common stock for their
expenses in forwarding proxies and proxy soliciting material to the beneficial
owners of such shares. In addition to the use of the mails, proxies may be
solicited without extra compensation by our directors, officers and employees by
telephone, telecopy, telegraph or personal interview.
Other Matters
Management does not intend to bring before the Annual Meeting for
action any matters other than those specifically referred to above and is not
aware of any other matters which are proposed to be presented by others. If any
other matters or motions should properly come before the Annual Meeting, the
persons named in the proxy intend to vote thereon in accordance with their
judgment on such matters or motions, including any matters or motions dealing
with the conduct of the Annual Meeting.
Our 2002 Annual Report, including financial statements and reports
thereon of Rachlin, Cohen & Holtz LLP and PricewaterhouseCoopers Inc,
accompanies this Proxy Statement but is not incorporated in and is not to be
deemed a part of this Proxy Statement.
Proxies
All stockholders are urged to fill in their choices with respect to
the matters to be voted upon, sign and promptly return the enclosed form of
proxy.
By Order of the Board of Directors,
Dawna Ferguson
Secretary
November 25, 2002
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PROXY PROXY
SILVERSTAR HOLDINGS, LTD.
Proxy for Annual Meeting of Stockholders - December 16, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints, as proxies for the undersigned, CLIVE
KABATZNIK and DAWNA FERGUSON, or either of them, with full power of
substitution, to vote all shares of the capital stock of Silverstar Holdings,
Ltd. (the "Company") which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of the Company to be held on Monday, December 16, 2002,
at 12:00 p.m., Eastern Standard Time, at the offices of Jenkens & Gilchrist
Parker Chapin LLP, The Chrysler Building, 405 Lexington Avenue, Ninth Floor, New
York, New York, receipt of Notice of which meeting and the Proxy Statement
accompanying the same being hereby acknowledged by the undersigned, and at any
adjournment or postponement thereof, upon the matters described in the Notice of
Meeting and Proxy Statement and upon such other business as may properly come
before the meeting or any adjournment or postponement thereof, hereby revoking
any proxies heretofore given.
EACH PROPERLY EXECUTED PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE ON THE REVERSE SIDE HEREOF. WHERE NO DIRECTION TO VOTE ON A
SPECIFIC MATTER IS GIVEN, THE PROXIES WILL BE DEEMED AUTHORIZED TO VOTE FOR EACH
LISTED NOMINEE TO SERVE AS A DIRECTOR, FOR PROPOSAL 2 AND WITH DISCRETION ON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side)
SILVERSTAR HOLDINGS, LTD.
A VOTE FOR EACH NOMINEE AND FOR PROPOSALS 2 AND 3
IS RECOMMENDED BY THE BOARD OF DIRECTORS.
1. ELECTION OF DIRECTORS - For Withhold For All
Nominees: Michael Levy, Clive Kabatznik, All All Except
Cornelius J. Roodt, Stanley Castleton and Joseph |_| |_| |_|
Weil.
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(Except Nominee(s) written above)
FOR AGAINST ABSTAIN
2. To ratify the action of the Board of Directors in |_| |_| |_|
appointing Rachlin Cohen & Holtz LLP as the Company's
independent public accountants for the fiscal year
ending June 30, 2003.
3. The transaction of such other business as may properly
come before the meeting.
Dated ____________, 2002
Signature(s)
-----------------------------------------
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NOTE: Please sign your name or names exactly as
set forth hereon. If signing as attorney,
executor, administrator, trustee or guardian,
please indicate the capacity in which you are
acting. Proxies executed by corporations should
be signed by a duly authorized officer and should
bear the corporate seal.
- --------------------------------------------------------------------------------
(DELTA) FOLD AND DETACH HERE (DELTA)
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.